According to the budget recommendations made to the government by the Federation of Automobile Dealers' Association (FADA), dealers, workshops and service stations must be covered under the ambit of MSMED Act 2006, as the subsidies and incentives received under this act will provide much needed relief to them.
The association said that the move will help the sector which provides 25 lakh direct jobs to get access to loans at lower interest rates and also reduce tax burden.
"Our main request, amongst others, is to be considered under MSME on an immediate basis and consider industry status in the near or mid-term to our sector. Today only the auto workshops have been kept out of the MSME category, despite qualifying and following all regulations required as an MSME under all parameters," FADA President Ashish Harsharaj Kale said.
"The auto retail sector, despite its huge contributions does not avail of any incentive or support under any category currently."
Besides, FADA demanded that GST rates should be reduced to five per cent on margins of all pre-owned vehicles.
Additionally, the association said that the country's automobile sector faced severe stress and requested the government to resolve this by reducing overall GST or the cess charged on automobiles.
"We believe by doing so it will create a positive consumer sentiment and better affordability in automobiles, which have seen unprecedented price hikes currently and will do so in the future too, due to stricter, but much required regulatory norms," Kale said.
( With inputs from IANS )